TECH - Lenovo Caught In A 'Thucydides Trap' Between An Old Power And A Rising One | Benzinga
Key Takeaways:
- Lenovo’s shares nosedived after publication of an article citing a research organization saying the U.S. should ban the company’s computers
- Concerns are growing that weak Lenovo sales may have been a factor behind chip giant Intel’s recent worse-than-expected first-quarter revenue forecast
By Lau Chi Hang
The Greek historian Thucydides once pointed out that "It was the rise of Athens, and the fear that this instilled in Sparta, that made war inevitable” between the two historic rivals.
Those words carry new resonance more than 2,000 years later in the growing rivalry between the U.S. and China, leading some U.S. scholars to predict the significant likelihood of war as a great power’s position is threatened by a rising new power, giving rise to the phrase "Thucydides Trap.”
The constant tug-of-war between China and the U.S. has yet to trigger an actual war just yet. But successive swipes by the U.S. under various pretexts are taking a toll on China’s tech sector, each time drawing loud objections from Beijing. And concerns are growing that Lenovo Group Ltd. (OTC: LNVGF), one of China’s biggest high-tech success stories, could soon become the latest target, following publication of a recent alarmist article in the Newsweek magazine.
The PC giant’s stock was one of the few that defied gravity and held its ground last year when the Hong Kong market went into freefall. It helped to steady the Hang Seng Index with a remarkable 81% gain in 2023, even as other blue-chip stocks tanked.
Big potential for AI in PCs
As artificial intelligence (AI) shows signs of potentially revolutionizing the world and nearly all sectors, integrating the technology into PCs has taken on a new urgency. As one of the world’s top PC makers, Lenovo has worked hard to show it is rising to the challenge. At last year’s International Consumer Electronics Show (CES), the company showcased more than 40 AI devices and solutions, including a dozen PCs with AI functions.
Investors were impressed by what they saw, helping to fuel the strong gains for the company’s ...